LT. COL. LAKHBIR SINGH BEDI vs MODERN DENIM LTD.

THE short point involved in for our consideration for which the revisionist-complainant has preferred this revision is that whether the District Consumer Disputes Redressal Forum-II [for short hereinafter referred to as the District Forum] was justified in staying the proceedings under execution till the complainant obtains the consent of the B.I.F.R./Appellate Authority to pursue with the execution case. THE brief facts necessary for proper adjudication of the revision are narrated as under:

THE revisionist-complainant filed a Complaint Case No. 649 of 2002 before the District Forum-II alleging deficiency in service on the part of the respondents/O.Ps. in not making payment to the revisionist/complainant in compliance with the order dated 11.8.1999 of the Company Law Board (for short hereinafter referred to as the CLB). THE District Forum after detailing reasons in its judgment dated 24.9.2002 allowed the complaint of the revisionist and directed O.P. Nos. 1 to 3 to pay to the complainant as per the reschedulement order of the CLB dated 11.8.1999 along with interest @ 9% per annum from the date the amounts became due under the CLB order dated 11.8.1999 till payment. The complainant filed execution case before the District Forum-II referred to above i.e., Execution No. 262 of 2002 under Section 14 of the Consumer Protection Act, 1986 [for short hereinafter referred to as the C.P. Act] for executing the order dated 24.9.2002 passed in the Complaint Case No. 649 of 2000, which was opposed by the O.P. Nos. 1 to 3 on the ground that M/s. Modern Denim Ltd. (O.P. No. 1) had made a reference being Case No. 325 of 2000 to the B.I.F.R. and further made a prayer that under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short hereinafter referred to as SICA), the execution could not be proceeded with.

The District Forum while deciding the execution case observed in para 4 of the order dated 11.7.2003, which has been impugned under this revision, that it was not seriously disputed by the complainant that the reference had been registered by the B.I.F.R. being Case No. 325 of 2000 and after relying upon on the judgments of the Hon''ble Apex Court and the Hon''ble National Consumer Commission cited by Mr. B.B. Mittal, Advocate appearing for O.P. Nos. 1 to 3, as also of this Commission dated 7.9.2000 passed in Revision No. 92 of 2000, M/s. Parkash Industries Ltd. v. B.B. Mittal, wherein it was ruled that if a reference is pending before the B.I.F.R., then no proceedings for winding up of the industrial company or for execution or for distress etc. shall lie or be proceeded with except with the consent of the Board of the Appellate Authority, stayed the proceedings under execution till the complainant obtains the consent of the B.I.F.R. or of the Appellate Authority.

THE revisionist in person before us placed reliance of the judgment of Madhya Pradesh State Consumer Disputes Redressal Commission, Bhopal rendered in the case of SOI Pharmaceuticals Ltd. v. Smt. Shyamala Khemani, II (2000) CPJ 275=2000 (1) CON.LT 631, wherein the M.P. State Commission held that mere pendency of such a petition for winding up is no bar to the entertainment and disposal of the complaint by the Consumer Fora and such a bar will be only when the order for winding up of the company is passed by the competent Court. It was further held by the M.P. State Commission that Section 22 of SICA does not put any restriction on power of the Fora or Commission under the C.P. Act. THE revisionist contended that the District Forum failed to appreciate the judgment of the M.P. State Commission in the case of SOI Pharmaceuticals Ltd. (supra) and the citations quoted by the O.Ps. have no relevance to the execution. He further contended that the District Forum cannot review its own order passed earlier after taking into consideration the proceedings in execution as no stay has been granted by the B.I.F.R. THE revisionist further contended that the District Forum modified its earlier order dated 24.9.2002 without having any jurisdiction to amend its own order passed in Complaint Case No. 649 of 2000 at the time of execution. On the other hand, Mr. B.B. Mittal, Advocate while opposing the grounds taken in the revision, placed reliance on the judgment of the Hon''ble Supreme Court of India in the case of Real Value Appliances Ltd. v. Canara Bank and Others, III (1998) CLT 1 (SC)=V (1998) SLT 220=AIR 1998 Supreme Court 2064, which he also cited before the District Forum, wherein the Hon''ble Apex Court in para 21 held as under: "21. It is to be noticed that according to Section 22, in case of "inquiry under Section 16 is pending, then, notwithstanding anything in the Companies Act or any other instrument etc., proceedings for winding up of the company or for execution or distress or the like against the property of the company or for the appointment of a receiver and no suit for recovery of money or enforcement of any security or of any guarantee shall lie or be proceeded with further, except with the consent of the Board or as the case may be, by the Appellate Authority, Section 22-A permits the Board to pass certain conditional orders."

IN para 22, the Hon''ble Apex Court further observed that "It is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the B.I.F.R. for in case the company''s assets are sold, or the company wound up it may in deed become difficult later to restore the status quo ante." The Hon''ble Apex Court upheld the view taken by different High Courts in rejecting such a contention and in holding that the inquiry must be treated as having commenced as soon as the registration of reference is completed after scrutiny and that from the time, action against the company''s assets must remain stayed as stated in Section 22 till final decisions are taken by the B.I.F.R. Mr. B.B. Mittal, Advocate next cited the case of M/s. Standard Motor Products of India Ltd. v. M. Mohan Rao, III (1994) CPJ 118 (NC), wherein the Hon''ble National Consumer Commission held while dealing with the question whether during the currency in force of such an order passed by the B.I.F.R. the Consumer Forum can proceed to pass orders for recovery of amounts from the Sick Industrial Undertaking, held after relying upon its earlier order passed in Revision Petition No. 489 of 1992, Standard Motor Products of India Ltd. v. Dr. S. Jayakumar, decided on 18.5.1993 that order passed by the District Forum cannot be sustained. The State Commission ought to have set aside its order entertaining the complaint, when matter sub-judiced before the B.I.F.R., if not in revision, at least in the exercise of its suo motu revisional power. It is thus well settled by the Hon''ble Apex Court and the Hon''ble National Commission that no proceedings for winding up of the industrial company or for execution or for distress shall lie or be proceeded with except with the consent of the Board or the Appellate Authority which in the present case is B.I.F.R. Thus the authority of the Madhya Pradesh State Commission reported in the case or Sol Pharmaceuticals Ltd. (supra) is of no help when the law has been well settled by the Hon''ble Supreme Court. The District Forum has thus rightly after relying upon the judgment of the Hon''ble Apex Court and the Hon''ble National Commission, stayed the execution proceedings till the complainant obtains the consent of the B.I.F.R. or the Appellate Authority. The District Forum, in our considered view, has rightly stayed the execution proceedings and kept open the remedy to the complainant/decree holder of restoring the execution case on the application of either parties when the reference to the B.I.F.R. has been finally disposed of or after the complainant has obtained the consent of the B.I.F.R. or the Appellate Authority. Resultantly, the revision lacks merit and is dismissed. Let copies of this order be sent to the parties free of charge. Revision dismissed.